By Gray Wattenbarger
Staff Writer
‘Cash for Clunkers’ was a government implemented program to help boost the economy for automakers and to help rid U.S. roads and highways of vehicles whose fuel consumption was subpar. Although there are still many people who are for the program and an equal amount that are against it, the program did help boost sales to automotive companies in America, both foreign and domestic.
Ford Motor Company, based in Dearborn, Michigan, was one company in particular who saw an increase in sales from the Cash for Clunkers program. As one of the truly American automotive companies, Ford has seen a decline in profits since 2005. In the third quarter of 2009, when the Cash for Clunkers took place, Ford finally saw itself coming out of the red and into the black, boosting sales up to $357 million. They claim it was due to higher car and truck prices, less expensive parts, and increased market shares in stocks.
Unfortunately, Ford did have to drastically cut back on costs to finally achieve a profit. Namely by cutting retiree benefits, healthcare costs, and making a vast amount of layoffs throughout production facilities in North America and Europe. By cutting back on things, Ford was able to save around $1 billion to help pay off debts and to offset the drop in revenue.
Despite cutting back on costs, Ford is still trying to recover back from the economic downturn. Recently, Ford introduced the Taurus SHO, a more powerful version of the Taurus, one of the best selling cars in America. The Mustang has also seen a redesign, as well as other trucks and SUVs. By adding and redesigning cars, it means that cutting cars is also necessary. Low sales have prompted Ford to end the production of a few cars, most notably the Taurus X wagon, introduced as the Freestyle.
As Ford endeavors into the future, they have new plans of introducing new more fuel efficient automobiles and continuing to grow their line of hybrid cars, trucks, and SUVs. Those plans, however, are always restricted by their factory workers. Since Ford is a member of the United Auto Workers union, they are subject to protest from their workers whenever they please. In a recent offer by Ford, their workers denied the company’s attempt to freeze salaries, saying that they were sufficient enough to not have to fall back on limiting employees’ salaries.
Despite the recent increase in sales, Ford is still in debt for around $26.9 billion, yet they refused government aid, as reported by MSNBC. As production rises for some of their most fuel efficient vehicles, Americans are still reluctant to purchase a new car because of the economy around them, no matter what make they may be. Unless Ford can dig its way out of debt and the economy to finally resemble some sense of consistency and equilibrium, the American public will continue to stray away from purchasing new cars and place automakers in a difficult position.
